Partnership....

[SDSinc]

Need your advice please. I have been approached by a father and son team that has been cleaning for high end designers, small air ports (they clean planes) and high end marinas (clean big yachts) for over 30 years. The father is a freaking wizard when it comes to knowledge and spot removal. They charge about $4 per square and have been, up until recently relatively busy. But they are good ole' boys and do all their invoicing, books and paperwork by spiral notebook. They have a van and two portables. The father is retiring and of coarse is worried about his son. The son is one of those 'I just wanna make lots of money' types. Well no sh-t, we all do. I get the feeling that he wants the rewards but not the pain that it takes to obtain and keep customers not to mention running the back end of the business. He just wants to clean. Anyway they want to form a partnership. They know I have a tm and a business structure that can do all the scheduling, invoicing, etc etc.
We are meeting this week to discuss what each of bring to the table. I would love the knowledge his father could bring to my young business but I am very weary of partnerships. Let's assume that I decide to move forward with a partnership and assuming that I will have the proper agreements drawn up and all the t's crossed and i's dotted, how shall I structure this partnership.

He will do most if not all of the work. Most of the time he will will use his set up but what if he uses mine? Then what percentage of compensation? What if it's my lead and or customer or his lead and customer? Any thoughts on the break down of percentages? I was thinking if I brought in the job then it's 60/40 me...if he brought it in then it's 60/40 him. But what about if I'm doing the billing and scheduling? A flat 10% for that?

Your thoughts?

Thanks.

 

[Lee Stockwell]

sniff sniff....


NOPE!

 

[Fred Homan]

Good luck....From what I have heard.....Most of the time partnership do not work out....

 

[Bob Foster]

Offer him a job with a realistic potential to earn good money. If dad wants more for him then his dad can let him run their existing company.

The only offer to him would be to allow him to be the first choice to service their old clients and you would pay him a generous compensation plan. See Harper's posts on compensation and how to buy out the other company.

 

[joe harper]

Rick..

I understand what he is bringing to the table...!

What are you bringing...?

 

[daniel@procarpet]

Twice the work to make the same.

 

[tmdry]

sniff sniff....


NOPE!

+1

 

[Mikey P]

Even @ $4.00 per ft a plane aint worth it.


That is what you meant, right?

 

[SDSinc]

Hey, thanks for the avatar!

Yea, planes, can't be that much in them, unless that they do other services in them.

I think I bring to the table-
1. A warehouse that we could use as an in plant facility to possible do rugs or difficult upholstery, not to mention park the equipment and supplies.

2. Full business support, I.e. A full time girl that answers the phone, schedules jobs, invoices, follow up calls etc. etc.

3. Full lic and insurance, liability, workman's comp.

4. Capital, I could easily throw down for whatever we decide we may need to expand...360i, cinmax,

5. Sales ability, I feel very confidant that I can sell myself and our services.

6. A large customer base that I can tap into that i have yet to...designers and homeowners that have used my moving and storage and furniture delivery service.

 

[Steve Toburen]

Hey, thanks for the avatar!

Yea, planes, can't be that much in them, unless that they do other services in them.

I think I bring to the table-
1. A warehouse that we could use as an in plant facility to possible do rugs or difficult upholstery, not to mention park the equipment and supplies.

2. Full business support, I.e. A full time girl that answers the phone, schedules jobs, invoices, follow up calls etc. etc.

3. Full lic and insurance, liability, workman's comp.

4. Capital, I could easily throw down for whatever we decide we may need to expand...360i, cinmax,

5. Sales ability, I feel very confidant that I can sell myself and our services.

6. A large customer base that I can tap into that i have yet to...designers and homeowners that have used my moving and storage and furniture delivery service.

Rick,

Sounds like you need something called ...

EMPLOYEES! Not "partners" with all the issues they bring. (You can "fire" a non-performing employee.) Run away from this one.

Steve
www.SFS.JonDon.com

PS The best definition of a typical partnership I ever heard? "Marriage without sex." All of the disadvantages/ none of the advantages. Run away fast.

 

[floorguy]

ditto

 

[Contemporary Carpet Clean]

If the people wanting to be partners dont have a good repeat and refferal business after 30 years with constant work somethings wrong!!! We would never be able to keep up with all the work in the summer time with one truck and 2 guys working! We have been in biz for almost 37 years. In the winter time (our slowest time) we run one truck at least 5 days a week and sometimes a second 1-2 days a week. Something doesnt sound right. However I would make them part owner (probably 70 you and 30 percent them). Sounds like it might be worth a try. Do it for 6 months or a year and see what happens. If the kid sucks let him go and your done with the deal. In my eyes you have only work and money to gain with more potential custys!

 

[Brian R]

I've been in a partnership...it's a marriage...and you should only be married to the one you love.

Trust me, if you're not an attorney, partnerships are not a good idea.
They get as much say so as you so the courts end up making decisions for you.

Run and run fast away from it.

Hire him, make him an investor...set up a corporation with you as the President/CFO....
Whatever.

Don't do the partnership thang.....It's like putting yourself in prison.

 

[Lefty724]

I would hire him as a sub or employee. He can service his existing customers under you're name and in return he would get some steady income? I just got out of a partnership and I don't think it's a good idea…just like they said ^^^^^ like a marriage with no benefits!

 

[Out of Character - 0]

Keep your business separately owned and operated. Your companies can work together like partners if you think there's something there. Like Steve said, it doesn't sound like you need them at all.

 

[rick imby]

Sounds like his business is totally different than yours.

The Old man is who you want to do business with but you are going to be married to the son.

Many sons of hard working guys don't want to be hard working guys. They want it as easy as dad had it after years of hard work not the way Dad had it when he was learning and developing his craft.

The son will be the most expensive employee you ever had and probably one of the least effective. The dad wants to retire. You think he wants to work with you?

It sounds like you need some help to develop what you have, contacts, capital, and equipment. Hire a go getter to develop your contacts. Don't take in a partner.

Run from this partnership deal. It is lonely at the top but you are looking to partner with the wrong guy.



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[SDSinc]

Good replies all. Thanks

 

[TonyM]

Just a few questions since I have been involved in a partnership:

1. What does he really bring to the table(equipment-how old etc.)
2. What is the size of his client base in reality(does he have reliable records and accurate info on his "notebooks?"
3. What is his profitability per job and what kind of revenue has he been doing for the last 5 years?
4. Do you personally know the father and son and their character, specifically the sons?( remember blood runs deeper than a business deal, if things go bad)

 

[Bob Savage]

You may as well just sit down with both of them and have discussion about exactly what they are looking for, but make no commitments, and do not appear too eager either. Feel them out.

If you don't talk further, you will always wonder, "maybe I should have done that partnership THING". I doubt it will be a good idea, but you need a little "face to face" with them to ease your decision.

It sounds like the old man is worried about his son in the business quite a bit. If not, he would just have his son take over.

You already notice his son wants, and wants, but may not be willing to do the hard work that is required.

That itself is a deal breaker.

Do not become his son's second father.

After your discussion with them, think on it, and then think about it some more, and the decision will come easy.

 

[Hoody]

Hire him as an employee. Or just buy him out, or both. But DO NOT become a partner.